Zakah on different items of wealth
Fatwa No: 165375

  • Fatwa Date:13-10-2011 - Thul-Qi'dah 16, 1432
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Question

Dear shaik Assalamu Alaikum please help to know how much zakat i have to pay. 1. I hold 8.33cents of agricultural land. Market valued : Rs.5 lakhs; Now producing rice/pea-nuts etc.,Yearly Income : Rs.500/-only. 2. I hold a flat/apartment in a residential bldg. Market Value is: Rs.12.75 Lakhs; and producing a rent of Rs.42,000/- per year (Rent of Rs.3500/-pm). 3. I also hold a residential area situated land of 4.5Cents. Valued: Rs.36 Lakhs. Only land hence no income per annum. 4. I also brought last June 2010 for Rs.7.5 Lkahs, a small shop semi-constructed. Not given to rent. Hence, no Income per month/year. 5. I just hold 4 tulas of gold ornaments, used (not new) at my end. 6. After 'Bhaga Parishkaram" - I got now got 37 cents (Valued about Rs.22 Lakhs) of agricultural land, and 4 cents of jungle/forest area mountaineeing land in hill station (about having value of 2 lakhs) - Hence no income from both sites due to agri.labourers non-availability to cultivate crops. On these, i owe/have to pay around Rs.6 Lakhs to other blood relatives. Cash in hand is nil. Provident Fund: Rs. 25,000/-. Shares/Stocks: Rs.10,000/- only. I have sell some, to bring cash for zakat distribution, is present scene. No silver, or any other valuables holding. My wife & kids have no other gold ornaments, other than mentioned above. Kindly do spent such your valuable time, do help me to go ahead of arriving one concrete figure to distribute as zakat, for which Allah will bestow both of us, with good health & enough wealth, Insha-Allah. Awaiting for your email. Thanks & regards -manahmed

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

As for the entire land that you own and which you did not purchase with the intention of selling, then you do not have to pay Zakah on its value. However, Zakah is due on the output of the entire agricultural land which you purchased with the intention of benefitting from its produce if it is Zakatable such as peanuts, rice and the like at the time of harvesting it if the output reaches the Nisaab. The Nisaab of plants and fruits is 5 Awsuq (plural of Wasq), i.e. 300 Saa’s, which equals 653 kg according to the view of the majority of the scholars.

However, only one-tenth must be paid out of the output if the land is irrigated by rain or by water that runs on the land without costing money to transport it, and half of one-tenth should be paid if it costs money to irrigate the land.

However, the scholars differed in opinion about costs of growing, ploughing and harvesting whether or not it is to be deducted from the output of the land and no Zakah is due on it. The majority of the scholars including the four Imaams and others are of the view that it should not be deducted from the output and that one must pay Zakah on all the output. For more benefit, please refer to Fataawa 90450 and 81404.

As regards the flat, if you had purchased it with the intention of benefitting from its profit, and you did not purchase it with the intention of selling it, then there is no Zakah on its price; rather, Zakah must be paid on its income if it reaches the Nisaab and a whole lunar year elapses over it. The Nisaab is what equals 85 grams of gold from which 2.5% must be paid.

The same thing applies to the shop if you had purchased it with the intention of renting it. So, Zakah must be paid only on its revenue if it reaches the Nisaab and a whole lunar year elapses over it. But the Zakah should not to be paid on the value of the shop unless you had purchased it with the intention of trading. So, you should look at all what we mentioned and pay 2.5% from it. For more benefit on Zakah on rental property, please refer to Fatwa 127382.

As regards the gold that you mentioned, if it belongs to you, you do not have to pay Zakah on it itself because it is less than the Nisaab. However, if you have other money if added to the gold it reaches the Nisaab and a whole lunar year elapses over it, then Zakah must be paid on it, which is 2.5%. For more benefit, please refer to Fataawa 83665 and 82925.

With regard to the shares, if you have intended by buying it to benefit from its profit and revenue and not to trade in it, then there are two cases regarding this issue:

1- If what represents the shares are fixed assets, like buildings, equipments and sets, and what is intended is to benefit from the profit of these shares, then you should pay its Zakah like the Zakah on exploited assets, like estates, rented lands, so the Zakah shall be on the profit only and not on the capital of the shares provide it (the profit) reaches the Nisaab by itself or with other similar (Zakatable) items added to it and a whole lunar year elapses over it.

2- If what represents these shares are tradable items, like if the activity of the company is buying and selling, then you should pay 2.5% from the capital money and the profit thereof, because they are tradable items.

On the other hand, if you have intended by buying these shares to trade in it and make a profit out of it itself, then you should pay Zakah on it like tradable items. So, at the end of each lunar year, you should look at the value of the shares in the market and pay out 2.5% of its value, whether or not you made a profit, and whether its value increased from the price at which you purchased it or it decreased. What is important is that it should reach the Nisaab. For more benefit, please refer to Fatwa 81504.

As regards the debts that you have, then you should deduct it from the amount of the Zakah that is due if you do not have other (non-Zakatable) property which you may consider for this debt. For more benefit, please refer to Fataawa 87557 and 116828.

Allaah Knows best.

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